PARIS (Reuters) - France’s long-declining manufacturing sector returned to growth last month even more strongly than initially thought, a survey showed on Tuesday, suggesting a gradual recovery is taking hold in the euro zone’s second-biggest economy.
Data compiler Markit said its final manufacturing purchasing managers’ index rose to 52.1 in March from 49.7 in February, reaching its highest level since June 2011.
That topped a preliminary reading of 51.9 and brought the index above the 50-point line dividing expansions in activity from contractions for the first time since February 2012.
“The French manufacturing sector delivered a much improved performance in March, buoyed by solid growth of new orders,” Markit senior economist Jack Kennedy said.
“With the sector having finally moved into expansion territory following a prolonged spell of weakness, firms will be looking for signs of a convincing recovery taking hold before looking to boost areas such as employment,” he added.
The flow of new orders grew at the fastest pace since May 2011, boosting production and causing backlogs to grow for the first time in eight months, the survey found.
Employment at manufacturing firms improved marginally, ending two years of job shedding, Markit said. Firms also cut their selling prices in the face of tougher competition, which could put pressure on already strained margins.
The improvement in the manufacturing sector offers rare good news for President Francois Hollande as he seeks to live up to promises to turn around the economy and bring down unemployment.
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Reporting by Leigh Thomas; Editing by Hugh Lawson